Fitch Ratings has cautioned that Nigeria’s $5 billion tax revenue swap (TRS) program could create complications for the country’s ongoing external debt restructuring efforts.
The rating agency’s warning highlights concerns that the structure of the TRS may limit fiscal flexibility or introduce new liabilities that interfere with negotiations with international bondholders.
The assessment arrives as Nigeria’s Eurobond yields have edged higher, reflecting a broader reassessment of risk across emerging markets.
Investors are increasingly pricing in the possibility that US interest rates will remain elevated for longer, which has put additional pressure on sovereign debt in frontier markets.
The rising cost of capital makes the prospect of a smooth restructuring even more critical for Abuja.
Nigeria’s debt restructuring process has been protracted, with the government seeking to reduce its external debt burden while maintaining access to financing.